United Kingdom
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APD hike ‘short-sighted’ and should be scrapped
Sunday, 04 Aug, 2009
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The World Travel and Tourism Council has weighed in with opposition against government plans to raise Air Passenger Duty.
The global tourism industry body warned that the revised tax will discourage long-haul travel, reducing UK spending in emerging markets, and thereby undermining the government’s support of millennium development goals aimed at countering poverty and unemployment in developing nations.
Increased APD, which is being implemented in two stages from November this year and November 2010, will primarily penalise long-haul travellers, the WTTC argues.
It will mean a 112% rise in departure tax on a flight to Australia from the end of 2010.
WTTC president and CEOJean-Claude Baumgarten said: “Clearly, this will have a very damaging effect on demand and, at a time when demand is already very sluggish due to the recession and factors such as the H1N1 influenza virus.
"Moreover, the move which is intended to help reduce carbon emissions is also likely to backfire since passengers travelling to long-haul destinations will probably choose to use airports in continental Europe as their departure point for their long-haul flights.
“This would likely increase short-haul flights out of the UK, and so end up increasing, rather than decreasing, carbon emissions.”
He added: “The UK Government’s decision to increase the APD for departures from UK airports from this coming November shows that it continues to underestimate the economic importance of travel and tourism.
Adding WTTC’s support to the widespread opposition already voiced by the industry around the world, he said: “We strongly endorse the government’s decision to review the level of duty proposed for air travel to the Caribbean since this is particularly unfair.
“It is based on an illogical system of bands that means travellers will pay a lower tax to travel to many points of the USA that are much farther from London than any island in the Caribbean.
“But we believe the overall APD system should be scrapped.”
WTTC maintains that the government’s move to increase APD is very short-sighted given the current recession, since travel and tourism – more than any other sector – has the potential to kick-start economic recovery by stimulating continued spending on travel, thereby generating much needed employment.
“Of equal concern is the fact that the APD is billed as an environmental tax, yet none of the money so far collected has been hypothecated and ploughed back into either the environment or the industry,” argued Baumgarten.
The imposition of this tax will reduce UK tourism spending in developing countries undermines government claims to be supporting millennium development goals, aimed at alleviating poverty and generating employment in emerging markets.
“The APD acts as a distortion to free trade and this will ultimately work against the millennium development goals by crippling regions most in need of travel and tourism to run and support their economies.
“Take the example of the Caribbean. UK spending on tourism in the region totalled £1.45 billion in 2008 – a significant contribution to these island nations, for which the travel and tourism economy contributes 14.5% of total GDP.”
Instead, the government should be looking to provide a supportive policy framework to help sustain demand through the downturn and ensure that valuable aid to developing countries is not cut off by a reduction in travel by UK citizens to those destinations.
by Phil Davies
Phil Davies
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